by Brett Molina, USA TODAY

by Brett Molina, USA TODAY

Shares of BlackBerry plunged 16% in trading Monday, to $6.62, after the company confirmed it will abandon plans for a sale as it struggles to gain momentum in the smartphone market.

In a statement, BlackBerry announced it will receive a $1 billion investment from Fairfax Financial Holdings, the company that originally struck a deal to acquire the Canadian smartphone maker. The story was first reported by The Globe and Mail.

BlackBerry CEO Thorsten Heins will step down from his role, replaced on an interim basis by John Chen, who will also serve as the executive chair of the BlackBerry's board.

"BlackBerry is an iconic brand with enormous potential - but it's going to take time, discipline and tough decisions to reclaim our success," Chen said in the statement. "I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees."

Before BlackBerry, Chen served as chairman and CEO of Sybase, an enterprise and mobile software company acquired in 2010 by SAP.

"Putting a non-device person as an interim CEO is a clear sign that the devices business is not what matters anymore," says Gartner analyst Carolina Milanesi. "The software and services (business) is where they have the assets and where they need to take the company."

The announcement is the latest twist for the ailing smartphone maker as competitors such as Apple, Google and Samsung continue to dominate. After sales of its smartphones running its new BlackBerry 10 software failed to attract consumers, the company announced it was pursuing "strategic alternatives" for its business, including a possible sale.

In September, BlackBerry said it reached a tentative deal with Fairfax on a buyout valuing the company at $4.7 billion. Along with Fairfax's investment, Chairman and CEO Prem Watsa will join BlackBerry's board.

"Fairfax is a longtime supporter, investor and partner to BlackBerry and, with this investment, reinforces its deep commitment to the future success of this company," Watsa said in a statement.

BlackBerry has a tough battle ahead as it attempts to regain footing in the smartphone market. The company reported a second-quarter loss of $965 million, while Microsoft's Windows Phone operating system has surpassed BlackBerry for third in market share, behind Apple iOS and Google Android.